Grandparent Wealth and Children's Life Chances: A Treatise on the Extended Family & Evidence from the Panel Study of Income Dynamics

Recent research has examined the role of parental wealth in determining children's outcomes and experiences, along with the distribution of assets and wealth across families in the United States (Conley 1999; Caner and Wolff, 2004; and Gittleman and Wolff, 2004, for example). This paper shifts the focus to the grandparent branch of the family tree. The paper argues that limiting one's study to the wealth held in a child's nuclear family may yield an inaccurate picture of the amount of wealth that is available to finance goods and services (or activities) related to childrearing, such as schooling. The paper offers a theoretical argument to justify the consideration of grandparents' wealth, and it presents empirical research describing the distribution of wealth in the grandparent branch of the family tree across different subgroups of children, and then analyzes the relationship between grandparent wealth and child outcomes. Acknowledgements This research was supported partly by a Skidmore College Faculty Development Grant. Debts are owed to John Brueggemann, and to the University of Maryland’s Democracy Collaborative, the University of Kentucky’s Center for Poverty Research (UKCPR) and the Institute for Research on Poverty (IRP) at the University of Wisconsin for their “in-kind” assistance in the form of shortterm residencies at these institutions. The author also wishes to thank participants at the UKCPR Brown Bag Seminar Series, participants at the IRP Noon Seminar series, and a discussant at the 2007 Eastern Economic Association meetings for helpful comments. Any mistakes are the sole responsibility of the author.